Owners of Hybrid Cars to Get Tax Breaks

Owners of vehicles with high fuel mileage, including hybrid cars, will qualify for tax breaks.

From July, the bus-only lane on expressways will remain in effect for the entire week.

Such measures will be announced tomorrow at a meeting of the Committee to Save Energy chaired by Prime Minister Han Seung-soo.

An official said the measures are based on the understanding that conservation steps are urgently needed due to soaring oil prices. The measures emphasize reducing energy consumption for transportation, home and industrial uses.

As a follow-up measure to its planned strengthening of energy efficiency rating standards in August, the government will encourage consumers to buy fuel-efficient cars by increasing tax breaks for buyers of vehicles with first-grade energy efficiency from next year.

The first-grade rating goes to cars that get more than 15 kilometers per liter of fuel. Given the new standard, 44 types of domestic cars can qualify for the rating.

Owners of subcompact cars are exempt from individual consumption and education taxes when they purchase cars. They also do not pay acquisition and registration taxes or have to buy government bonds when they register their cars. They also get a tax refund on gasoline tax (up to 100,000 won per year) and half off at public parking lots and on expressway and congestion tolls.

To encourage wider use of public transportation, the government will designate one lane on highways exclusively for buses all week long from July. Large-scale parking lots will be built at major stations to allow commuters to park their cars and use public transportation.

The building energy rating system will also be expanded, as experts say buildings can significantly contribute to saving energy.

Apartments built by state-owned agencies including the Korea National Housing Corporation and newly built government buildings must be rated higher than second grade in energy efficiency ratings.

Other incentives include raising the floor space index and partially lifting the cap on the sale price of apartments that are tentatively approved as energy-efficient buildings.

changkim@donga.com